Japan to lend $122 billion to help quake recovery: report

TOKYO – Japan’s government is creating a lending plan worth up to 10 trillion yen ($122 billion) to help companies recover from this month’s devastating earthquake and tsunami, a business newspaper reported Saturday.

Japan has launched a flurry of initiatives this week to shore up the economy and calm roiled markets following the magnitude-9.0 quake and tsunami on March 11 that killed thousands of people, wrecked factories and triggered an unfolding nuclear crisis.

Under the latest plan, companies will receive low-interest loans or interest subsidies for daily expenses or to repair quake and tsunami damage, the Nihon Keizai Shimbun, or Nikkei, reported. It cited no sources.

The quake damaged factories belonging to major automakers including Nissan Motor Co. and hundreds of smaller manufacturers. Power cuts due to the shutdown of 11 of Japan’s 54 nuclear power plants also have disrupted production.

The government has yet to give an estimate of recovery costs. Goldman Sachs said earlier this week it estimated quake damage at $200 billion.

Japanese leaders also are considering raising the upper limit on how much large companies can borrow in an emergency, the Nikkei said. It said authorities also might create a fund for longer-term lending to companies for quake recovery.

On Friday, the Group of Seven major industrialized nations agreed to support Japan with a joint intervention in currency markets after the yen surged against the dollar, threatening Japanese exports. Following the announcement, the Japanese currency backed away from Thursday’s all-time high against the dollar.

Also this week, the Japanese central bank tried to calm money markets by injecting 38 trillion yen ($470 billion) in emergency cash on top of its regular funding activities.